Pakistan today stands on the brink, and the coalition government of Prime Minister Yousuf Raza Gillani has to pull it back. And quickly. The start isn't spectacular but it is promising. Having secured a historic unanimous vote of confidence, Premier Gillani's first set of initsiatives indicates the nature of challenges his coalition government has to grapple with: growing terrorism, a sinking economy and a load of constitutional and legal controversies General (retd.) Pervez Musharraf has single-handedly produced in his clumsy attempts at clinging to power.

          Taking the last one first, the Gillani government has not yet shown an inclination to implement the swiftest solution to the source of the constitutional morass: getting rid of General Musharraf through impeachment. Party sources say that this is "too radical, and too early in the day." Beneath this reluctance lurks the fear that the desperate general might dissolve the National Assembly. "We do not have the numbers [in the Senate] and neither are we trying to get them together for the final assault on General Musharraf," says a high-ranking party source.

          For now, the Pakistan Muslim League-N has kept close to its chest its divergent view on the retired general's fate. However, in private meetings, former prime minister Nawaz Sharif has thrown caution to the winds and expressed a keen desire to "try General Musharraf" for his crimes and award him "exemplary punishment." Party leaders say that Mr Sharif's view is party policy, and that in the presence of General Musharraf, political certainty will be hard to find. They also suspect that the Musharraf will not sit idle as the new buoyant parliament clips his powers to dismiss governments and make crucial appointments. "Ideally, we ought to strike and oust him before he makes a move, but we know that we have to keep our coalition partners on board and shape our preferences accordingly," says a senior member of the federal cabinet.

          More than coalition concerns, predominant are concerns of pragmatism. Party insiders admit that they have to "get their feet off the ground before taking on the besieged general."

           "We understand that he is without options, but till such time that we are firmly in government and have a grip on things, attempting to dislodge him would be inadvisable. His most potent weapon is article 58-2(b). Our first aim is to strike it off the constitution and then take him on. Till then, we are playing it cool," says a senior member of the Nawaz team from the Punjab. Ironically, but not unexpectedly, General Musharraf does not share the widespread perception that he is a "goner." A senior member of the Pakistan Muslim League-Q told Newsline that the general is still entertaining the hope that the PML-N -PPP marriage of convenience would collapse like a house of cards.

           "It is a matter of time," says the PML-Q leader, quoting the general, "and you will see them fight like little children, and that would be the time when other forces like the Q-League ought to come in and play their role." The same source also claims that the general is confident that Asif Ali Zardari, the PPP's co-chairperson, isn't interested in seeing him removed from power.

          Apparently, the Attorney General, Malik Abdul Qayyum is the one who has, on more than one occasion, reaffirmed the general's faith in the PPP leadership's goodwill. So much so that at one time, according to the Q-League leader, the president told Chaudhary Shujaat Hussain that if their party were to change the leadership, they might become more acceptable to Mr Zardari. Predictably, the Chaudharys weren't too happy about the suggestion. Chaudhary Shujaat later told a close friend that they "did for the president what no one could - rooting for his uniformed presidency, but now he wanted to use them again - this time by discarding the top man."

          PPP sources laugh off all peace-with-the-president talk, but seem to have no problem with keeping the illusion alive. "We lose nothing by keeping Musharraf in good humour, but are we going to bend and break our alliance with Mr Sharif for him? Forget it," says a member of the PPP Central Executive Committee. Whether General Musharraf is being led up the garden path only to be politically hanged later, shall be clear soon enough, but the last-ditch efforts on his part to somehow isolate the PML-N show that he has not mended his old ways. One of his close confidants, who recently spoke to him about retirement scenarios, about investments for stable profits and a secure old age, says that he wants to live in Pakistan but "isn't in the mood to call it quits." The Gillani government, it seems, is destined to see a messy final round with the presidency, which might derail its attempt, at governing the country.

          Musharraf's refusal to call it a day has aggravated the judicial crisis. While the detained judges of the Supreme Court have been freed from presidential custody, they are not back in the courts. Sources with access to the government's current thinking on the issue are confident that they will be restored.

           Athar Minallah, a lawyer who is the deposed chief justice Iftikhar Muhammad Chaudhry's eyes and ears and an informal advisor, is almost certain of the judges' return - something he was unsure of a few weeks ago.

           "There is nothing that we have heard from the PPP to belie these hopes. For the prime minister to have announced the release of the judges in his first speech is proof enough that the party leadership is not speaking from both sides of its mouth. There are rumours that Mr Zardari is not keen on allowing the chief justice back, but so far his words and actions are in sync," says the lawyer. Peoples Party sources too endorse the view that the old debate about whether to restore or not to restore the judges has been closed in favour of restoration.

          "There was a point when certain individuals [in the party] argued not to be swayed by public opinion and see whether [the reinstatement of] someone like the deposed CJ would lead to stability or instability. They wanted an end to the controversy in a manner that would lead to the departure of both Justice Dogar and Justice Chaudhry. But, fortunately, the majority opinion prevailed. As did the stern stance taken by the PML-N, which to us was embarrassingly bold and dented our party's image," says a PPP leader from Sindh.

         Even then, the problem remains - in the shape of Justice Abdul Hamid Dogar, upon whose orders a failed attempt was made by the Supreme Court staff to take over the residence of Justice Khalilur Rehman Ramday. Would he reconcile to a humbling demotion if the deposed chief justice, Iftikhar Chaudhry, were to return? Those from the PPP, who claim to have had recent access to him, say that he does not want to let go of his present position, regardless of how controversial this stand may be.

          "He would not have reached where he is now if it were not for the way he has played his cards," says a PPP source from the Zardari House in Islamabad.

          But this is not to underestimate Justice Dogar's legendary adaptability to circumstances. If in need, he is fully capable of taking another oath of allegiance, without demur. Says a PML-N leader: "There are three categories of judges: the famous five, including Justice Dogar who pre-dated the November 3 coup d'etat; those who were elevated from the High Courts; and those who were inducted during the period following the coup. The first category would eat humble pie and accept the deposed chief justice. The second category would go back to where they came from. And the third category would be scrutinised by the chief justice according to the Al Jihad Trust case judgment that has set such a precedent," says the source.

          "This solution, of course, assumes that the PCO judges would not team up with General Musharraf to attempt scuttling democracy again, when the original judges are restored," says the source. That is a fragile assumption and might get tested severely in the days to come. A peeved pack of PCO judges is no less dangerous than a retired general. Their alliance can be even more problematic, especially if it were to be forged for the sole purpose of bringing down the house.

          "Our worries are not centred on the power struggle with the judges or the general - that we are quite capable of winning if it comes to that point. It is the loss of vital time and energies that would have to be spent on blunting such a challenge [from the PCO judges and the general] to the new parliament, which is the most worrisome part of it. Our economy cannot afford more setbacks," says a financial advisor to the Gillani government, who has been in deep consultation with the new Finance Minister, Ishaq Dar, over the country's economic situation.

          The worry is not misplaced. The national economy has been on autopilot for two quarters straight. Starting November 2007 and stretching into April 2008, the whole country has been akin to the halt and the blind. Add to this the pall of gloom and uncertainty in the preceding three quarters (March 2007-November 2007), when General Musharraf tasked the entire state and political machinery to bring the then chief justice Iftikhar Chaudhry down, and the present-day grave economic conditions begin to make sense.

          But the picture isn't pretty, even without further political turmoil. Even before cabinet portfolios were allocated, Ishaq Dar, Naveed Qamar and Ahsan Iqbal, along with members of the Awami National Party (ANP) and independent economists, went into a huddle to find solutions to the myriad economic challenges. The bad news is that they have not found any because, as Naveed Qamar, now handling privatisation, says, "there isn't any."

          Most economists agree that the over 7% economic growth rate that the international donors were in raptures about, was essentially a bubble inflated by consistent manipulation of the twin markets of stocks and real estate, and a most brazen rigging of economic figures and data. This con economics by Shaukat Aziz, who has left Pakistan without any accountability, was always devoid of any long-term planning for even-handed distribution of wealth accumulating in the hands of a rapacious elite, as indeed it was short on attention to the obvious challenges on the road to steady growth. As a result, the Gillani government is dealing with an economy of shortages and deficits. Wheat flour is unavailable in the market. People wait for hours in queues at utility stores, literally fighting to get a kilo of a produce, 23-million tons of which is supposed to have been yielded last year by the country's green acres.

          Pakistan's power shortages are worse than in some parts of war-torn Iraq. Not a single megawatt has been added to the national electricity production capacity in the last eight years. The country's power needs have soared to 3000 MW, thanks in small measure to the rampant consumerism that Mr Aziz promoted through leasing and credit-card facilities. As industries shut down and inflation gnaws at daily life, millions are hammered under the poverty line. "The necessity of providing relief to the poor and economic comfort to the middle classes is the hardest challenge before us. We should not forget that these are the people who voted for us and they want to see a change in the situation," said Nawaz Sharif to a group of party members, who were not entirely convinced that getting the finance portfolio in a coalition set-up was a good move. But this immediate relief that Mr Sharif talked about has its limits, primarily because there is no fiscal space available to the government. It is dealing with a grim deficit situation.

          In nine months of the current fiscal year, Pakistan's trade deficit crossed $12b and current account deficit was 5.3% of the GDP. External debt has spiked from $33b to $40b over the last eight years. As international oil prices rise, the burden will have to be passed on to a consumer who is angry, frustrated and helpless.

          "What [the previous] government has done for us is to double the price of flour," says Anwar Ali, a 45-year-old security guard in Islamabad.

          "I earn Rs.3000 a month, but it costs Rs.4000 to feed and clothe my family. Can you make my budget for me?" he asks grimly. His budget will be just as problematic, even after the Gillani government has fixed the minimum wage at Rs.6000. Those employing the poor never pay them according to government recommendations. At any rate, runaway inflation cuts through the lifeline of relief being offered to the poor. The challenge before the Gillani government is to square rising public expectations and demands with economic realism that necessitates tough decisions. To trip on the economic front is to fall on the political plane.

          Sitting next to the economic-bust like condition is the spectre of terrorism. The coalition government has won millions of votes from the ground zero of General Musharraf's faltering counter-terrorism policy. PML-N leaders are clear-headed about the need to review this policy. In his meeting with US Deputy of Defence, John Negroponte, Mr Sharif first detailed the present-day situation in Pakistan and then posed the question to the visitor whether he too would not want to rethink a policy that has produced a deadly blow-back of suicide bombers on Pakistan's streets. Apparently, Mr Negroponte nodded in agreement. Or so it seemed, at that time. Since then, statements coming out of the US indicate that distrust is growing in Washington about a policy rethink that would involve talks with the local Taliban. Military sources in the NWFP admit that the Bush administration is becoming increasingly intrusive by hitting targets inside Pakistan territory and that such attacks "do create a strong anti-American backlash, which is then targeted at Pakistan." To the question as to what could be done to hold back the US hand from the trigger, the answer was, "very little."

          This presses the Gillani government between a rock and a hard place. Countering terrorism at home does require engaging with the Taliban and differentiating between desperate murderers and those who are open to the idea of a ceasefire in return for the cessation of US attacks. But the US is adamant that any dialogue with the Taliban would only help Al-Qaeda regroup under the aegis of Osama bin Laden, who, the CIA Director General Michael Hayden claims, is hiding somewhere in Pakistan's tribal belt bordering Afghanistan. The US is pressing its point of view hard onto the new government, putting it in an unenviable position where the room for counter-terrorism policy revision is dangerously slim. Yet a revision has to take place, and it will be spearheaded by the ANP's leadership.

          ANP sources say that a "major plan is ready to stabilise the traditional system for dispensing justice and settling disputes in the tribal belt, and also to open informal channels of communication with the Taliban." The sources also say that the Jamaat-e-Islami and the Jamiat Ulema-e-Islam have both agreed to extend a helping hand.

          "It will take time and patience [from the US] to reduce the sources of conflict and violence in the this part of our land. General Musharraf's zigzags and opportunism have created a trust deficit that needs to be bridged. We hope that Washington does not plunge into the area for quick results. That would be a disaster," says an ANP leader, who is likely to be part of the new peace offensive in the tribal belt. The Gillani government is seized of the volatility of the situation and has already activated its lobbying efforts in Washington for a "consensus approach towards the issue." Equally important, the first contact that the government has made with the army high command, led by General Ashfaq Kayani, has been on this particular issue.

          "Everyone has to be on board, particularly the armed forces," says a PPP leader. This is the right approach, but the question is how much time is there to carry it forward. The Bush administration has got used to working with a one-man system in Pakistan and might not understand the complexities of the new governing order in the country, which is accountable to the people. The Gillani government has its hands full of problems. It has been handed over a country that is economically bankrupt, constitutionally crippled and institutionally dysfunctional. Washington's failure to comprehend Pakistan's domestic problems is the last thing that the new rulers of Islamabad want from an ally that professes to be a well-meaning friend.

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